Three states forced wholesale insurance cancellations because of ObamaCare

posted at 8:01 am on October 31, 2013 by Ed Morrissey

Democrats desperate to defend Barack Obama from his own “you can keep your plan” lie have spent this week trying to shift blame to insurers. They didn’t have to change their plans, advocates argue, and could have had them grandfathered into the exchanges — even though HHS and the White House deliberately wrote the rules to make that all but impossible. CNN reports that insurers had nothing to do with it in at least three states, where the states themselves forced the cancellations in order to comply with ObamaCare:

President Obama may have promised Americans that they can keep their insurance if they like it, but that’s not the case in at least three states where insurance companies are required to discontinue plans that don’t meet Obamacare’s new coverage standards.

Virginia, Kentucky and Idaho have told insurance companies that they must scrap insurance plans that don’t meet the minimum coverage requirements laid out in the Affordable Care Act. Some states allow insurers to amend their current plans to include the new benefits, such as maternity care and prescription drug coverage, required under Obamacare.

But these three states have determined that with so many changes required under Obamacare, it’s easier to start over than to try to bring existing plans into compliance.

Ronda Sloan, a spokeswoman for the Kentucky Department of Insurance, explained the policy this way: “In this case, you’re talking about an entirely new product. They had to file a completely new policy. … It was easier just to start from scratch.”

Kentucky has been held up as a success story by ObamaCare advocates, where enrollments have been a little more robust than on the federal exchange. That may have been in part because the state forced insurers to cancel half of the plans in the state’s individual market, used by 600,000 people to buy insurance. Virginia didn’t give CNN any numbers, but did say that the cancellations force consumers back into the ObamaCare exchanges whether they wanted that insurance or not.

It’s as true in the other 47 states as well. Insurers had to change their plans in order to comply with ObamaCare requirements, not just out of sheer whimsical delight. CNN’s Jim Acosta tried to pin down Jay Carney on this point, but Carney insisted that it was the insurers’ fault. He added in enough caveats to Obama’s oft-repeated promise to make it sound like the small print at the end of a Cialis ad, though:

Senate Majority Leader Harry Reid (D-Nev.), who rallied all members of his caucus to support the landmark law, promised the Affordable Care Act (ACA) would let people keep the insurance plans they had at the time.

Reid touted that aspect of the law among its other benefits.

“It not only means making sure you can keep your family’s doctor or keep your healthcare plan if you like it, but also that you can afford to do so,” he said on the Senate floor on July 28, 2009.

Senate Democratic Whip Dick Durbin (Ill.) made the same promise two days later.

“Many people say: ‘I like my health insurance right now. I don’t want to change. I don’t want to go into Medicare or Medicaid. I like what I have. Would you please leave people alone?’ ” Durbin said.

“The answer is yes,” he added. “In fact, we guarantee it. We are going to put in any legislation considered by the House and Senate the protection that you, as an individual, keep the health insurance you have, if that is what you want.”

Senate Budget Committee Chairwoman Patty Murray (D-Wash.) said on June 10, 2009: “If you like what you have today, that will be what you have when this legislation is passed.”

We’ll see if they fall into line behind Carney’s double-speak, or they distance themselves from the White House. I suspect that will have a lot to do with whether they have to face voters again in 2014 or 2016.

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And what if people were allowed to keep their plans? The cost would have gone way up anyway right? Much more than the normal increases one might see year to year because the government is forcing insurance companies to cover high risk patients. Perhaps I am wrong but these companies have to make some kind of profit or is that a crime now? It’s not like the insurance companies can print money like the government does to cover their losses.

Does the employer mandate kick in before or after the election next year?

gophergirl on October 31, 2013 at 8:14 AM

In theory it starts January 1 2015 but employers have to start the process way before that date… The employers will start firing employees or reducing their hours below 30 hours week to avoid Obamacare starting no later than June 2014… If people think that plans cancellations, premiums and deductible increases have caused suffering to millions wait until the employers start firing their employees and reducing their work hours below 30 a week… The suffering will be incredible…

Because you plan meet the minimum requirements of Obamacare. If not they have to cancel it… it is the damn Obamacare law and they can only get around of the agitator of parasites will give them a waiver as he did in many cases….

OT: It appears that Megyn Kelly–to her credit–is turning the focus to what Obamacare mandates will to the employer group plans and the employees who belong to them. Obama put that off for a year, but I bet word will be getting out by next summer about the bad effects for those plans. I hope Dems get buried as a result.

One other underreported point: the limitations on doctors and hospitals that these new awesomely awesome plans that Obamacare requires.

Aetna isn’t cancelling our non-compliant plans until December 2014.
Sorta thought living in TX has something to do with it, but unsure, frankly.

Hubbly has been squirrelling away enough to cover our deductibles, so he and I plan to get ‘extreme exams’, treatments if necessary, in 2014, and by the time this plan is cancelled he’ll qualify for MediScare, anyway.

Your points don’t go far enough. What happens to public-employee plans? What happens to private-sector union plans? Apparently the PSUs are grandfathered–a real grandfather provision. In the private sector, I assume employers around 50 employees will lay off employees or reduce the hours of employees. For larger employers over 50 employees, they might reduce the hours of employees, and the large employers may do the same. In all these instances, premiums should increase and deductibility limits should increase while access to doctors and hospitals will likely decrease. Oh, and which employers will immediately or eventually dump their plans altogether?

Do Democrats, in their ignorance, just refuse to look at reality and see that Obamacare is a disgrace to fair government?! If Obamacare is so damn good why isn’t Congress enrolling in the plan instead of exempting themselves? This Bill needs to die by any means possible. Election 2014 for a Senate seat in Michigan will go Republican!!

I see another risk: Obamacare will give insurance companies the excuse to cull the herd (in existing plans) of those policy holders that appear with a continuous minus sign on the balance sheet.

I think were going to see secondary effects as they start gaming the system. (Case in point: My mother’s pension-provided HC plan was just dropped – totally – with no explanation or offsetting compensation.)

Oh, and which employers will immediately or eventually dump their plans altogether?

BuckeyeSam on October 31, 2013 at 8:40 AM

That is the worst thing that can happen… The disaster of all disasters… All what it takes is for a big corporation to dump their employees healthcare plans to the so called exchange insurance markets and many other corporations will follow soon after… These companies will save a lot of money by paying the fine and even give their employers few thousand dollars for the exchange insurance markers versus what they are paying now…

“Many people say: ‘I like my health insurance right now. I don’t want to change. I don’t want to go into Medicare or Medicaid. I like what I have. Would you please leave people alone?’” (Dick) Durbin said.

“The answer is yes,” he added. “In fact, we guarantee it. We are going to put in any legislation considered by the House and Senate the protection that you, as an individual, keep the health insurance you have, if that is what you want.”

We’ll see if they fall into line behind Carney’s double-speak, or they distance themselves from the White House. I suspect that will have a lot to do with whether they have to face voters again in 2014 or 2016.

Dirtbag already has his votes tabulated in ballot boxes stored in various warehouses around Cook County (and a few extra boxes in Cicero, just in case they are needed)… *sigh*

And what if people were allowed to keep their plans? The cost would have gone way up anyway right? Much more than the normal increases one might see year to year because the government is forcing insurance companies to cover high risk patients. Perhaps I am wrong but these companies have to make some kind of profit or is that a crime now? It’s not like the insurance companies can print money like the government does to cover their losses.

DaveDief on October 31, 2013 at 8:17 AM

It’s all going according to plan. I posted an article a couple of days ago on here about the insurance companies urging DC not to delay the individual mandate because it will cut into profits. I’m surprised that the left hasn’t latched onto this yet to scream about how the evil insurance companies only care about profits, but I guess they have to get there in a way to cover for Obama’s lie. It’s only a matter of time until the push for single-payer becomes stronger. I don’t know if they expected to have to push for it this quickly, but I can easily see it coming. Although Obama did delay the employer mandate, so maybe he was expecting to push for single-payer… althought that would imply that he’s smart…

I love watching the Kneepad Media, which spent every breath & resource getting this clown elected – twice – now “getting religion” and asking questions about a law more than half the country knew was terrible four years ago.

Some talking head–I think it was Scarborough–has said he’s talked with large company execs off the record, and they’ve said that within three years after the mandate applies to them, they’ll definitely dump the plans. They have a fiduciary duty to shareholders to maximize their return. A $2K per employee penalty vs. many thousands of dollars in health premiums.

Interesting point: I suspect that the penalties–unlike the premiums–will not be deductible.

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If your employer provides your plan, ACA-compliant or not, then it will not be cancelled, yet. That’s the totally illegal and capricious waiver of the Employer Mandate decreed by Barack the Benevolent (pees be upon him). Didn’t you get the memo or are you just clueless?
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Maybe you just haven’t done a lot research on this issue. Start here if you have any interest in being informed: Individual Mandate in Reform. This is a quick, easy read and provides the kind of summary information most people don’t have. Don’t ignore the Employer Mandate link on that page either; there is good summary information there.

In 2013, 36% of those who get coverage through their jobs are enrolled in a grandfathered health plan, down from 48% in 2012 and 56% in 2011, according to the Kaiser Family Foundation.

That makes about 40% of those who had employer sponsored plans with grand-fathered status have effectively already lost a plan they may have wanted to keep. I wonder how many gave up that status knowingly and willingly? Not many I’m sure.
Grand-fathered status is worth about as much as Obama’s word.

Another 25 million people, according to the CBO, have “nongroup and other” forms of insurance; that is to say, they participate in the market for individually-purchased insurance. In this market, the administration projected that “40 to 67 percent” of individually-purchased plans would lose their Obamacare-sanctioned “grandfather status” and get canceled.

How many people are exposed to these problems? 60 percent of Americans have private-sector health insurance—precisely the number that Jay Carney dismissed. As to the number of people facing cancellations, 51 percent of the employer-based market plus 53.5 percent of the non-group market (the middle of the administration’s range) amounts to 93 million Americans.

I love watching the Kneepad Media, which spent every breath & resource getting this clown elected – twice – now “getting religion” and asking questions about a law more than half the country knew was terrible four years ago.

Eat it boys- enjoy your ratings & ad revenue plunge into irrelevancy.

ICanSeeNovFromMyHouse on October 31, 2013 at 9:01 AM

Nice image. They’ve been sucking his d*ck for the past 6 years and now they smell so much like Obama it just makes me retch every time I’m near them. Which, happily, is not often.

These companies will save a lot of money by paying the fine and even give their employers few thousand dollars for the exchange insurance markers versus what they are paying now…

If companies start to do this without fully compensating employees with before tax dollars equal to what was being spent by the company on the health plan, I would fully expect and support lining up against a wall CEO’s and other top staff along with the boards of directors. Employees have been taking this recovery in the neck and you can blame it all you want on this regime’s policies but companies have been doing everything they can get away with to maximize their share price for the wall street elite at the expense of their workers and at some point it has to stop. Loyalty has to go more than just one way.

My husband’s company just laid off 20% of their non-retail workforce on Tuesday. Certainly, the company hasn’t always made the smartest business decisions, but with the never-ending recession, their sales have been in the dump for a couple of years, but being in a state mentioned above, this ‘healthcare’ mess certainly makes it a lot harder to try to recover.

Senate Budget Committee Chairwoman Patty Murray (D-Wash.) said on June 10, 2009: “If you like what you have today, that will be what you have when this legislation is passed.”

Aha! See, they never promised you could keep it when the law was implemented, only on the day it passed. There you go, you racist Rethuglicans, you just didn’t read the fine print! How is our super-smart President supposed to deal with such morons?

Idaho?
Well, if all of those plans were issued to people in either Boise or Moscow, probably no big deal; otherwise, armed security might be needed 24/7 for the non compos mentis civil servants in that state office as they are sought out by people who don’t take kindly to being lied to.

If companies start to do this without fully compensating employees with before tax dollars equal to what was being spent by the company on the health plan, I would fully expect and support lining up against a wall CEO’s and other top staff along with the boards of directors. Employees have been taking this recovery in the neck and you can blame it all you want on this regime’s policies but companies have been doing everything they can get away with to maximize their share price for the wall street elite at the expense of their workers and at some point it has to stop. Loyalty has to go more than just one way.